Bizspace Spotlight

No matter how mundane the topic, local economist Elliott Pollack sure knows how to grab — and keep — an audience.

That was the case at the Sheraton Phoenix Downtown on Tuesday.

Pollack, president of Scottsdale-based Elliott D. Pollack & Co., had several hundred people hanging on his every word as he walked them through the state of the national economy and how it ties back to Arizona and its real estate sector. He was speaking at the eighth annual “Arizona Trends Day” event, hosted by the Arizona chapter of the Urban Land Institute, along with another local economist John Lucking as one of multiple panelists for the day.

I posted another story today outlining the key points of that economist discussion. But here, I’d like to share some other tidbits from Pollack’s presentation that didn’t necessarily fit with my previous story, although are still worth noting.

Aside from his sarcastic verbal delivery — such as “Quite frankly it’s only because conditions have been so poor for so long that this (today’s economy) proves acceptable to people” and “In 2005, if you breathed you could qualify for a loan. Now essentially you need Warren Buffett’s balance sheet to qualify for an FHA (Federal Housing Administration) loan” — his data-heavy PowerPoint presentation also kept the audience in stitches.

Displaying on two massive screens on each side of the stage, Pollack’s presentation was peppered with random Internet photos and graphics that were latent with satirical jabs at government and certain private-sector industries believed largely responsible for the economic downturn.

He also gave one of the best layman’s-terms explanation I’ve heard of how Arizona’s economy collapsed.

Pollack noted that Arizona went from second to 49th in terms of job growth between 2006 and 2009, then let this really long sentence roll off his tongue:

“So how do we go from second to 49th? Well, all you need is a financial meltdown and a credit crunch at the same time you have an over-extended consumer and an excess of single-family housing, so housing prices decline so there’s a negative wealth effect and people stop spending, they can’t sell their homes, they can’t retire, so home building crashes, population flow is weakened, which is a big deal to Arizona, the housing size increases ... then all of a sudden you have no jobs to fill those office buildings and industrial buildings that were built and the whole economy goes down south,” which he then capped it off with “that’s essentially what happened.”

Arizona has since gone from 49th to fifth in job growth, he said, but how do we get back to No. 2?

Simply put, consumer spending starts to come back and eventually more people, slowly but surely, will move back to Arizona and “the one thing I didn’t anticipate is how much investors absorbed that excess supply of housing, so the excess supply goes away, housing prices start to rise, construction kicks in, construction jobs gain and essentially we start to take off again,” Pollack said. “It’s kind of the way we’re configured.”